The Reopening and Recovery of Hotels

The International Luxury Hotel Association (ILHA) launched their weekly webinar series, hosted by the NorthEast Chapter, with The Reopening and Recovery of Hotels. The webinar was moderated by Chelsey Leffet, Senior Vice President, HVS and included Romy Bhojwani, Head of Hospitality Asset Management, Brookfield, Prem Devadas, President, Salamander Hotels and Resorts and Jeff David, President, Fitler Club, Philadelphia.

Status check
Chelsey opened with a status check on where the brands stand as far as being open. Prem told us that they had been closed to follow federal guidelines for safety and was now in the process of opening their hotels, while Romy said that they had also closed most hotels to shrink down to a sustainable model and would now be looking at doing a market by market reopening with the operating format dramatically different as far as recreation and labor models. The good news was that golf was open at the resorts.

Romy felt that drive-in leisure markets would open first as the cabin fever intensifies, and business transient next, depending on the strength of the corporate balance sheets, with small group afterward. Large group would be last and require effective testing or a vaccine to be in place.

What changes can we expect?
Reopening costs are not as high as pre-opening costs, especially if you are able to bring the same staff back after furlough, though both Romy and Prem agreed that additional training would be needed to deal with COVID-19 related procedures as well as PPP inventory. They would also have to look at contactless check in and keyless entry across all hotels.

Jeff has a different business model that has different revenue drivers, their hotel space is limited so they can be nimble and creative. He is watching the extended stay model and spoke about the opportunity to restructure and how operations will need to be frugal and flexible.

Housekeeping will change substantially, according to Romy, as rooms will not be cleaned during stayover unless requested, with a deep clean at checkout, saving 30-35% on labor. F&B will eliminate buffets and rather have pre-portioned meals in a hygienic format.

Prem mentioned that they are still cleaning rooms daily using advanced technology but have pulled back on turndown and the room will stay vacant for 24 hours in the short term to further sanitize the space. Some of their signature buffets have been reinvented family style for the table, that can be brought in stages.

All agreed that rates should not be discounted as this will make it harder to recover in the long term, but rather create more programming and personalized service. Jeff highlighted Kempinski’s white glove butler service and Arne Sorenson from Marriott’s marketing showing a housekeeper with an electrostatic gun as clever visual cues to show guests that hotels are taking sanitary guidelines seriously.

He also talked about retooling your business to take advantage of outdoor spaces over the summer as families are ready travel for the weekend and relax at the spa after living close together the last few months.

In Closing
Romy: Stay close to your customer even while closed and ask your business and leisure guests what they are looking for when they come back. Hoteliers need to provide a safe, luxury experience but it also needs to be profitable. This is an unprecedented crisis that also offers the opportunity to make your business more profitable and efficient.

Prem: Employees come first, clients are our partners and key venders are essential to business, many of them have been so helpful. You need to stay in touch and work with all of them to create a partnership for the future and adopt sustainable practices that are here to stay.

Jeff: We need to retain the faith that we will prevail at the end, even though we must confront the brutal facts of our new reality. Leadership is paramount on a local and global level, you cannot hide away as that is the path to recession, if you don’t come out on top your staff will feel it. It’s all about the market need, not the market timing, it might mean eighteen months of the dark ages, but the longterm asset of your property will prevail at the end if you do it right